New Business Development

Moderator: Eli Jones, Dean & Sam M. Walton Leadership Chair, Walton College of Business, University of Arkansas

PAPER PRESENTATIONS

Should Salespeople Target Start-Ups? Examining the Advantages and Disadvantages of “Imprinted Relationships” - Tuba Ustüner, Rosemond Desir, and Joe Cannon Leveraging Social Networks to Improve Sales Prospecting Outcomes - Srinath Gopalakrishna, Andrew Crecelius, and Raghuram

Lyengar Email Negotiations in B2B Selling: Dynamic Use of Textual Cues as Influence Strategies - Jagdip Singh, Detelina Marinova, and Sunil Singh

Should Salespeople Target Start-Ups? Examining the Advantages and

Disadvantages of "Imprinted Relationships”

Presenter: Joe Cannon, Professor of Marketing, Colorado State University

Co-authors: Tuba Üstüner, Assistant Professor of Marketing, Colorado State University & Rosemond Desir, Assistant Professor of Accounting, Colorado State University

1. Start-Up Businesses –  We begin a relationship at

buying firm’s founding

2. Small Businesses –  Customers established –

already purchasing electronic components.

–  We pursue for new designs and/or to replace an incumbent supplier.

Case of Electronic Component Distribution: Sales Force Effort

Electronic  Component  Distribu2on  Co.  (ECD)  collaborates  with  customers  on  component  design.  ECD  works  with  electronics  manufacturers  that  build  components  it  co-­‐designs  with  customers.      Customers  

ECD CO. CASE: DISTRIBUTION CHANNEL

Electronic  Component  Distribu;on  Co.    

Electronic  Component  Suppliers  

Start-­‐Up  Businesses  

•  Collabora;on  &  design  

Small  Businesses  

•  Collabora;on  &  design  

•  Take  away  business  

1. Start-Up Businesses –  We begin a relationship at

buying firm’s founding

2. Small Businesses –  Customers established –

already purchasing electronic components.

–  We pursue for new designs and/or to replace an incumbent supplier.

WHO SHOULD YOUR SALESPEOPLE TARGET?

Electronic  Component  Distribu2on  Co.  (ECD)  collaborates  with  customers  on  component  design.  ECD  works  with  electronics  manufacturers  that  build  components  it  co-­‐designs  with  customers.      Which  customers  do  we  target?  Why?  

•  Case study •  Research questions & hypotheses •  Theory •  Research method and data •  Findings •  What have we learned?

AN AGENDA

•  Do founding characteristics matter for buyer-supplier relationships?

•  What are costs or benefits to imprinted customer relationships?

RESEARCH QUESTIONS

ANIMALS “IMPRINT” ON THE FIRST THING THEY SEE

ANIMALS “IMPRINT” ON THE FIRST THING THEY SEE

ANIMALS “IMPRINT” ON THE FIRST THING THEY SEE

•  Founding conditions and…

– Fraternities – Employment relationships

ORGANIZATIONS HAVE ALSO BEEN FOUND TO IMPRINT

•  Imprinted customer - a marketing relationship where a supplier establishes a relationship with a customer at the time of the customer’s founding.

•  What could be imprinted on customers in

founding relationships?

ARE “IMPRINTED CUSTOMERS” DIFFERENT?

H1: Imprinted customers make greater relationship specific investments.

H2: Imprinted customers are more loyal.

H3: Imprinted customers are more profitable.

H4: Imprinted relationships are more resilient during an economic downturn.

H5: Controlling for relationship specific investments, loyalty, and higher discounts, imprinted customers generate higher customer equity for suppliers.

HYPOTHESES

•  Data –  Financial and relationship measures from 361

customer relationships –  Quarterly data over four years

•  Measures –  Whether a customer is imprinted, –  Size of customer wallet, –  Share of customer wallet, –  Net sales billed to this customer, –  Gross profit, –  Customer investments in relationship specific assets,

& –  Customer loyalty.

RESEARCH METHOD

•  Analysis – Time series regression

ANALYSIS

H1: Imprinted customers make greater relationship specific investments. (preliminary support)

H2: Imprinted customers are more loyal. (preliminary support)

H3: Imprinted customers are more profitable. (preliminary support)

H4: Imprinted relationships are more resilient during an economic downturn. (preliminary support)

H5: Controlling for relationship specific investments, loyalty, and higher discounts, imprinted customers generate higher customer equity for suppliers. (preliminary support)

RESULTS

Practice •  Directing sales force territory development

–  Rewards specific to “imprinted relationships” –  Sales managers may utilize quotas, commissions,

and bonuses may wish to incentivize salespeople to direct more effort to building “imprinted relationships.”

Theory •  First application of organizational imprinting in the

marketing literature. •  The results show support for the imprinting

process and suggest an institutional driver of customer equity and loyalty.

WHAT HAVE WE LEARNED?

WHAT DO WE HAVE YET TO LEARN?

IN THE END, WE ALL WANT TO BE THE BIG DOG!

•  Questions? •  Comments

REACTIONS?

Leveraging Social Networks to Improve Sales Prospecting Outcomes

Presenter: Srinath Gopalakrishna, David and Judy O'Neal MBA Professor, University of Missouri Co-authors: Andrew Crecelius, Doctoral Student, University of Missouri Raghuram Iyengar, Associate Professor, The Wharton School, University of Pennsylvania

Daun2ng  Dreadful    Dilemma  

Sales Prospecting

Networking

“Build  Centers  of  Influence”  

“Get  Referrals”  

Research Questions

Network  

Prospec2ng  Outcomes  

Network Terminology (Measures)

E

A

A

A

E

AA

AA

E

A

A

A

E

A

A

A

E

A A

A

Size      Density    

Diversity    

Average  2e  strength    

Research Context

Insurance  Company  

Data Collection Components

Agent Survey “Sociometric” questions Strategic expenditures Personality

Company databases “Who” “Where” Quoting activity

ρ = -0.15**

Prop. New Business

Prop

. Hig

h Q

ualit

y

0% 100%

100%

0%

Quoting: The Trade-Off

E  

A  

A  

A  

E  

A  

A  

A  

A  Network Size

+

Acquisition Retention

+

Results: The Network

Density

++

E  

A  

A  

A  

E  

A  

A  

A  

Acquisition Retention

Results: The Network

Diversity

+0  

E  

A  

A  

A  

E  

A  

A  

A  

Acquisition Retention

Results: The Network

Tie Strength

++

E  

A  

A  

A  

E  

A   A  

A  

Acquisition Retention

Results: The Network

Remaining Questions:

Types of networks? Pros / Cons?

Latent Class Segmentation Analysis

Network Type 1

E  

A  A  

A  

A  A  

The strategic networker

E  

A  A  

A  

A  A  

The clique networker

Network Type 2

E  

A  A  

A  

A  A  

The power networker

A   A  

Network Type 3

E  

A  

A  A  

The wallflower

Network Type 4

Model-Predicted Prospecting Outcomes

NEW,  L.  QUAL  

EXISTING,        H.  QUAL  

NEW,  H.  QUAL  

EXISTING,          L.  QUAL  

!  The network matters!

!  Structure

!  Composition: Who you know

!  Distinct network types

Summary

Influence Strategies in Email Negotiations during B2B Selling

Presenter: Sunil Singh, Doctoral Student, University of Missouri Jagdip Singh, AT&T Professor, Case Western Reserve University Detelina Marinova, Frances Ridge Gay Professor and Associate Professor of Marketing, University of Missouri

B2B EMAIL NEGOTIATIONS

Challenges

•  Lean

•  Flat

•  Restrictive

•  Verifiable

•  Depth

•  Creative

INFLUENCE STRATEGIES IN B2B EMAIL NEGOTIATION

Recommendation

Promises

Ingratiation

Assertiveness

Information Sharing

INFORMATION SHARING

Information Sharing

Provide relevant facts, data, product specs, and solution/contract related information

RECOMMENDATION

Recommendation

Provide logical arguments to suggest superior quality of one’s solutions

INGRATIATION

Ingratiation Increase one’s attractiveness towards others (e.g., customers)

PROMISES

Promises

Provide an explicit offer to fulfill a future action

ASSERTIVENESS

Assertiveness

Provide a call for action on the part of others (e.g., customers)

WHAT WE KNOW ABOUT INFLUENCE STRATEGIES

Nothing using emails

No universal “truth” – Effectiveness of influence strategies varies by buyer orientation/seller ability

Hard strategies (assertiveness) produce positive outcomes (under some conditions)

Soft strategies (recommendation) produce negative outcomes (under some conditions)

RESEARCH SETTING

Industry: Heavy Equipment Manufacturing with annual sales of ~ $ 2 Billion

Firm: Top Tier with annual sales of ~ $ 100 Million

Customers: Utilities, Oil & Gas, Mining

Data: Unfettered access to all salesperson emails Survey of salespeople behaviors Interviews/Inputs from sales leaders

DATA CHARACTERISTICS: 31 PROJECTS

12

19

LOSS

WIN 71 268 751

Min Avg. Max

29 195

455

Min Avg. Max

# of Emails

Duration of Projects (Days)

7 29

52

Min Avg. Max

6 16 44

Min Avg. Max

0 8

114

Min Avg. Max

0 12

185

Min Avg. Max

Duration Between Emails (Days)

CUSTOMER CHARACTERISTICS

12

19

LOSS

WIN 2 11

30

Min Avg. Max

2 7

20

Min Avg. Max

Relationship Length (Years)

8 11

Yes No

Preferred Vendor

3 9

Yes No

SALESPERSON CHARACTERISTICS

12

19

LOSS

WIN

18

1

Male Female

8 2

9

31-40 41-50 51+

12

1 6

1-5 6-10 10+

9 3

Male Female

2 4 6

31-40 41-50 51+

7

1 4

1-5 6-10 10+

Gender Age (Years) Tenure with Firm (Years)

EMAILS AS DATA: ANALYTICAL CONTRIBUTIONS

Expert Input (hypothetical emails for

each strategy)

Unique Word Pairs (for each strategy)

Influence Library

(corpus, proximity, conjugates)

Machine Learning Tools

(automate, accuracy, update)

Dynamic Model (time varying, levels,

combinations)

INCIDENCE OF INFLUENCE STRATEGIES PER EMAIL

12

19

LOSS

WIN

Information Sharing

1.37

0.06 0.34 0.41 0.24 0.38

2.04

0.11 0.23 0.33 0.29 0.58

Assertiveness Strong Ingratiation

Weak Ingratiation

Recommen- dation

Promises

Information Sharing

Assertiveness Strong Ingratiation

Weak Ingratiation

Recommen- dation

Promises

DO INFLUENCE STRATEGIES HELP WIN CONTRACTS?

-8

-4

0

“Win” Index

0

12

24

Information Sharing Intensity Recommendation Intensity

-8

0

8

0

3

6

“Win” Index

Promise Intensity Assertiveness Intensity

1 2 3 1 2 3

1 2 3 1 2 3

DO INFLUENCE STRATEGIES HELP WIN CONTRACTS?

-8

-4

0

0

12

24

Information Sharing Intensity Recommendation Intensity

“Win” Index

-8

0

8

0

3

6

Promise Intensity Assertiveness Intensity

“Win” Index

Alone Combination

1 2 3 1 2 3

1 2 3 1 2 3

HOW INFORMATION SHARING WORKS

Information Sharing effect on Winning

Ingratiation Intensity

-2

-4

0

-1.4

-2.1

-2.7

-.8 -.8

1 2 3 0

-2

-4

0

1 2 3 0 Promise Intensity

-1.1 -1.3 -1.5

-.8

Weak Ingratiation Strong Ingratiation Promises

HOW ASSERTIVENESS WORKS Weak Ingratiation Strong Ingratiation

Ingratiation Intensity

3

0

6

1.1

2.2

3.3

1 2 3 0

3

0

6

1 2 3 0 Promise Intensity

1.5

2.9

4.5

Promises

Assertiveness effect on Winning

KEY INSIGHTS

Assertiveness increases “win” likelihood but only when used with promise or weak ingratiation

Information sharing does not by itself or in combination help to “win” contracts

Mixing Promises and Information Sharing is a bad idea

Weak ingratiation helps assertiveness influence but hurts information sharing influence in “win” likelihood

PRACTICE INSIGHTS

“Wins” associated with less use of information; more use of assertiveness and promises

Information sharing best used alone; Other strategies more effective only in combination

Power of weak (not strong) ingratiation when paired with assertiveness; also, {promises + assertiveness}

Limited use of influence strategies; information strategy most common; recommendation least

NEXT STEPS

Time varying effects (e.g., information strategy)

Negotiation process (e.g., continuous customer response modeling)

Confirm and extend (out-of-sample data)

Word-pairs that carry influence strategy (identify & test)

Dean

NEW BUSINESS DEVELOPMENT PANEL DISCUSSION

Walton College of Business

Eli Jones Dave Hooker

Corporate Services

Clemson University

Ken Powell Sr. Director - Global Bus.

Development & Ops

Landmark/Halliburton

Lindsey Nelson VP - Sales Productivity & Talent Development

CareerBuilder

Moderator Subject Matter Expert Panelists